Before we consider how the DEU calculates future SAWW increases, it is necessary to look back to past SAWW changes. In the last 50 years there have been only two instances where the SAWW has decreased from the prior year. Since Labor Code Sections 4659(c) and 4453(a)(10) only apply increases in the SAWW to life pensions and permanent total disability benefits, there is no effect on the benefit rates for those two years.

When the DEU indicates a historical 50-year average of SAWW increases, they mean exactly that. Thus, instead of averaging the decreases in the SAWW with the increases, the DEU averages only the increases of the historical SAWW data. (I’ll save you the trouble of looking it up – 2004 and 2011 are the only instances in the last 50 years of any reduction in the state average weekly wage). An average of just the SAWW increases over the last 50 years does come to 4.6%.

It took the patient guidance of a very smart friend to help me to understand how this works:

When determining the proper startingrate for a permanent total disability case, you must first turn to Cal. Labor Code § 4453(a)(10). This statute dictates that the limits (as in the statutory minimum and statutory maximum limits) are to be increased by the increase in the state average weekly wage (or SAWW).

Four benefits in California workers’ compensation are affected by changes in the state average weekly wage (or SAWW).1

Temporary total disability benefits

The maximum and minimum benefit rates can be affected by the SAWW.

“Commencing on January 1, 2007, and each January 1 thereafter, the limits specified in this paragraph shall be increased by an amount equal to the percentage increase in the state average weekly wage as compared to the prior year.” Cal. Labor Code § 4453(a)(10).

Life pension benefits

The statutory life pension rates are now increased by the SAWW as directed by the recent Duncan v. WCAB (X.S.) case.

“For injuries occurring on or after January 1, 2003, an employee who becomes entitled to receive a life pension or total permanent disability indemnity as set forth in subdivisions (a) and (b) shall have that payment increased annually commencing on January 1, 2004, and each January 1 thereafter, by an amount equal to the percentage increase in the “state average weekly wage” as compared to the prior year.” Cal. Labor Code § 4659(c).

Permanent total disability benefits

First, the minimum and maximum limits for permanent total disability benefits are increased, then the benefit rates themselves are increased.

“Commencing on January 1, 2007, and each January 1 thereafter, the limits specified in this paragraph shall be increased by an amount equal to the percentage increase in the state average weekly wage as compared to the prior year.” Cal. Labor Code § 4453(a)(10).

“For injuries occurring on or after January 1, 2003, an employee who becomes entitled to receive a life pension or total permanent disability indemnity as set forth in subdivisions (a) and (b) shall have that payment increased annually commencing on January 1, 2004, and each January 1 thereafter, by an amount equal to the percentage increase in the “state average weekly wage” as compared to the prior year.” Cal. Labor Code § 4659(c).

Death benefits

“A death benefit in all cases shall be paid in installments in the same manner and amounts as temporary total disability indemnity would have to be made to the employee, unless the appeals board otherwise orders.” Cal. Labor Code § 4702(b).

Did I just describe two increases to the permanent total disability benefit rate? Huh, so I did.

Tune in tomorrow for more on Duncan v. WCAB, COLA’s, and SAWW increases!

We’ve all seen charts with the State Average Weekly Wage (“SAWW”) increases printed on them.1 But, how useful are these when you’re dealing with an opposing counsel who won’t accept your chart or calculations based on that chart?

It sure would be nice to have all the SAWW information from the Division of Workers’ Compensation all in once place. Well, it just so happens I’ve already done this for you.

Here is a copy of every DWC Newsline from 2003 through 2009 with information on every SAWW increase from 2004 through 2010, all ready to go in one handy-dandy PDF.